Had he known what the future held for his money, the complainant who contacted The Sofia Echo to seek assistance, would have never made that phone call. But he thought it was a good idea to invest in a developing property market, so he could secure some extra cash influx. After all, he had bought some shares on the UK’s Footsie market in the past. Whatever the outcome of that gamble might have been, one thing remained for sure. Consequently, the man, who wished to remain anonymous, had his name and phone number listed in a public register anyone could access and use for various purposes, including for soliciting people to buy things.
That is how, he supposed, Jeff Mills from the Blue Star Management (bluestarmanagement.eu) found him. Mills presented himself as “an adviser in shares and property,” and offered to sell shares in a Bulgaria-based company called Black Sea Investments BG, JSC (blackseainvestments.net). Its main business, the complainant was told, was buying land in Bulgaria, construction of office and apartment buildings in Sofia and Plovdiv, and more.
“A boiler room style salesmanship,” the man concluded in a phone interview with The Sofia Echo, from his home in the UK. By definition, ‘a boiler room’ is really a room staffed with telemarketers, who use aggressive sales tactics to sell stock, land or whatever else possible. Often, boiler rooms disappear the way they have appeared – suddenly.
Back then, he was willing to try. “I went to their website, examined them and decided to call,” he said. What resulted from the conversation could be measured in 5000 more “preferred convertible shares” in the Black Sea Investments BG, JSC for the newly-found buyer, and 10 000 pounds less in his bank account. “Very professionally sold,” he said.
The payment had to be made to Societe Generale Marocaine de Banques through Prestige Management Plc, International Escrow Agents & Real Estate Project Managers, which has listed on its website an office address in Gibraltar.
It all seemed to be going smoothly until about two months ago, when the buyer decided to call Jeff Mills and explain that he wanted to sell half of his shares, because he needed some money back. According to the man, this had been the initial agreement, that whenever he was “hard up for money,” he could lift some at any given stage. The complainant said Mills tried to talk him out of it and transferred him to talk to Brian James, presented as the company’s executive director. The latter assured him that, of course he would get some money back, and later added that because the money was in an offshore bank account, there might be a problem with tax if they send it the same way. Time passed and nothing happened, the buyer kept calling phone numbers he had for various representatives, all starting with the Spanish international dialling code (+34).
A closer look at the website that advertises Black Sea Investments BG, JSC reveals that it has been constructed with JPEG file format images, which cannot be searched and indexed by Google. The site requires a user name and a password, and once accessed, it offers little but general information regarding some of Bulgaria’s ski and coastal resorts as well as some videos. For contact information, it lists offices in Sofia and Bourgas.
A search in Whois, the domain data base, revealed that the domains of both websites (bluestarmanagement.eu and blackseainvestments.net) have been registered and most likely run from overseas.
Neither of the companies could be found in the UK’s Financial Services Authority (FSA) register. FSA is an independent, non-governmental watchdog, which regulates British financial services markets, exchanges and firms. It also provides up-to-date information for consumers, including whom to trust when deciding to buy. It has been accepted that if a UK company is listed in the FSA’s register, it means that it runs a transparent and fair business. Regularly, FSA issues alerts with which it aims to “warn investors against dealing with unauthorised firms.” One such alert was issued on May 2 2008, featuring a firm identifying itself as Blue Star Management, with a registered address in Palma de Mallorca, Spain, and which may possibly target UK citizens.
The Sofia Echo has made repeated attempts to contact for comment all of the phone numbers that the buyer has used to communicate with the Blue Star Management. There was no answer. The Sofia address listed for the Black Sea Investments BG, JSC is in the World Trade Centre at 46 Dragan Tsankov boulevard. While attempting to contact the company, The Sofia Echo found that the phone number provided was not in service, and there was no answering machine. The management of the World Trade Centre verified that there is a company with the same name registered, but it is using a virtual office. This means that it has a postal address, where it receives mail, and it uses a phone with a recording machine, but it does not occupy an actual space. According to the complainant, until not long ago, someone who did not speak English was answering that same phone number.
The second office in Bourgas has listed a mobile phone number that was disconnected.
“The story is quite different from what it appears to be,” Jan-Erik Grothe, an executive director of the Black Sea Investments BG, JSC, said in a phone interview with The Sofia Echo. Grothe explained that he had also been contacted by representatives from the Blue Star Management in 2007. At the time, they assured him that there was a group of investors who were looking to invest in the Bulgarian real estate market. Grothe found the possibility intriguing. Then too many things began to look suspicious, Grothe said, until he decided to run an audit on his company, which, according to him, enraged his business partners. Grothe also alerted the FSA.
“We found out that Blue Star Management had sold a single share for 3.5 pounds, whereas the nominal price has been one lev per share,” Grothe said. “Also, they have misused the name of my company, I think most of the brokers were not operating under their real names. We stopped doing any business with them.”
Grothe said he suspected that the escrow agents and the sellers from the Blue Star Management were all the same people. Some of the company’s major shareholders were preparing to take legal action against Blue Star Management, Grothe said.
“At this point, I still think that it can be a genuine thing (the companies and the investment),” the complainant said. “But I can’t get in touch with them and they didn’t send me what they’d promised.”
What seemed to be a connection out of the blue, however, was a phone call the buyer received from Jeff Mills, two days before this article went to press. Mills told him that Blue Star Management had stopped doing business with Black Sea Investments BG, JSC, because the company had been taken over by someone else. The buyer had just recently received a new set of paperwork to review and sign. Mills insisted on taking a look at this, so he could give advice. Though when asked to leave his new phone number, Mills refused, according to the buyer.
“I am really disappointed. At this particular stage, if I get my money back, I would be happy enough,” the complainant said and added, “I’d been scared.”
